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A Month in the Life of an REO

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If you intend to sell REOs, get ready to be the eyes and ears of the lending institutions that take over those properties. Starting with a drive-by broker price opinion, you'll need to provide lenders with as comprehensive a picture of the properties' value as possible, since the lenders will probably never see them. Here's a sketch of what it's like to work with one REO property for a month.

Day 1

Took possession of the house on Elm Street today for XYZ Mortgage. Offered the occupants $2,500 to vacate in 15 days and turn over the keys.

Day 15

Ordered new locks, since the occupants have moved out. Walked through to test the plumbing, furnace, and remaining appliances. Property doesn't seem vandalized, but the furnace is on the fritz, there's a hole in a bedroom wall, and a windowpane is missing in the living room. The neighborhood is dicey--must arrange to have property boarded up for safety. Ordered roof, termite, septic, and radon inspections. Also called Mighty Maids to have the place scrubbed.

Day 16

Contacted three general contractors for repair bids on the Elm Street house. Took photos of the interior and exterior, which I'll include with my broker price opinion for the mortgage company. My assistant opened an account through my broker to pay the utility and maintenance bills on the property.

Note to me: Lender will pay for lawn mowing service only twice a month (if this house is still on the market in the spring.)

Day 18

Evaluated three contractor bids and recommended one to the lender with the caveat that in this area, furnaces must be working before property can be sold. Supplied ''as is'' and ''as repaired'' list prices, though I showed XYZ that in this market it won't realize a profit without making the repairs. Along with my broker price opinion, I included photos of the furnace and wall, and provided information on the school district and projected neighborhood values.

Day 19

Wouldn't you know it? The basement has termites. I've called in a specialist.

Day 21

The lawn was a bigger job than I originally thought. Besides mowing, a lot of debris needed to be removed.

Day 23

Contractor fixed the window and bedroom wall and did some other much-needed plastering and repainting.

Day 25

Furnace is up and running.

Day 26

Mighty Maids did their magic and cleaned up after the contractor, too.

Day 27

Took final set of photos of repairs as well as the interior and exterior of property.

Day 29

Gave XYZ Mortgage the photos, along with a month's worth of bills for reimbursement. Whew! The property is ready for marketing. Now, where are my MLS sheets . . .

Sheryl Vogel is an REO specialist with Realty Stars--Better Homes and Gardens, New City, N.Y. She closed 54 REO transactions in 1995, which was 92 percent of her overall business. You can contact her at 914/638-1081.

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